Gold edged lower on Friday and was set to post its biggest weekly drop in over three months on a stronger dollar, while investors awaited a key US inflation data for cues into the Federal Reserve’s monetary policy trajectory. Spot gold was down 0.1% at $2,874.69 an ounce, as of 0232 GMT.
Bullion is down 2% so far for the week, its biggest weekly drop since November 2024, and on track for its first weekly decline after eight consecutive gains. US gold futures eased 0.3% to $2,886.80.
The dollar index was set for a weekly gain of 0.7% so far, making greenback-priced gold more expensive for foreign buyers.
“While gold is deemed as a safe-haven, the uncertainty on the trade front may still see profit-taking activities extend further, amid a stronger US dollar,” said IG market strategist Yeap Jun Rong.
US President Donald Trump said on Thursday his proposed 25% tariffs on Mexican and Canadian goods will take effect March 4 along with an extra 10% duty on Chinese imports because deadly drugs are still pouring into the US from those countries.
Philadelphia Federal Reserve Bank President Patrick Harker expressed support for continuing to hold short-term borrowing costs in the current range of 4.25%-4.50.
Gold is seen as a hedge against political risks and inflation, but higher interest rates dampen the non-yielding asset’s appeal.
Investors now await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation measure, due at 1330 GMT.
“I do not think rate pricing will see any significant shift, with several components in the CPI and PPI suggesting that the PCE inflation could remain under control and hence, may not sway rate expectations as much,” Yeap said.
Spot silver rose 0.4% to $31.37 an ounce, platinum firmed 0.3% to $951.95 and palladium gained 0.1% to $920.34.
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